State financial regulators warn Floridians about Bitcoin

State financial regulators warned Floridians that unregulated and uninsured digital payment systems, such as mobile banking and bitcoin, come with risks.

Drew Breakspear, the commissioner of the Florida Office of Financial Regulation, has been looking into these new payment models for several months now.

He said until standards are put in place, events like the recent hacking of the bitcoin website Mt. Gox are going to happen and consumers will not be protected.

“I think Bitcoin and virtual currencies are going to be part of the financial markets,” he said. “We are not saying to people in Florida, ‘don’t use a bitcoin.’ We are saying, ‘if you use a bitcoin, understand what it implies.’ It does not have the same structure in place. And those were caught in Mt. Gox are not like the Target customers who are getting their money back. They’re not. It’s gone."

Right now, very few companies in Florida accept bitcoin as payment. However, Commissioner Breakspear said his office has made anticipating risks in Florida’s financial markets is a top priority.